The year ended on June 30, 2006 is the 50th year of the company's operations. The completion of five decades of successful business marks an important milestone in its history.
It is therefore befitting to the occasion of company's expansion in the area of biotech pharmaceutical manufacturing through its subsidiary BF Biosciences Ltd which is being set up in joint venture with the Bago Group of Argentina and is expected to come online in 2007.
During the year under review the company achieved net sales at Rs 752.22 million registering 14.7% growth. The company's net profit after taxation amounted to Rs 175.87 million which works out to Earnings Per Share at Rs 17.51 as against Rs 15.29 in the preceding year.
The Board recommended cash dividend @40% as well as stock dividend 20%. Demand growth for the pharmaceutical industry continued to remain at 12% during the year. However, inflationary pressures on inputs particularly energy, construction materials, increased the cost of operations as well as investment in the country.
Ferozsons Laboratories Ltd was incorporated as a private limited company on January 28, 1954 and was converted into a public limited company on September 8, 1960.
The company is listed on the Karachi, Lahore and Islamabad Stock Exchanges. The company is primarily engaged in manufacture and sale of pharmaceutical products. Its registered office is in Rawalpindi whereas its corporate office is situated at 14th Floor, Saudi Pak Tower, Jinnah Avenue Islamabad. It is domiciled in Rawalpindi and its manufacturing facilities are located in Nowshera NWFP.
On September 26, the market value of its share was recorded at Rs 172 per share carrying very high premium over the par value. During the last one year market value of its share remained very high as it ranged between Rs 169 and Rs 258 per share. At the current market value its market capitalisation has soared to Rs 1.73 billion from a modest paid-up capital of Rs 100.47 million.
The company has signed an agreement with laboratories Bago'SA, Argentina to set up the first biotech pharmaceutical plant in Pakistan for the manufacture of medicines to treat Hepatitis and Cancer, at an approximate initial cost of Rs 416 million. Major letter of credits with suppliers have been established. Erection, construction, installation and commissioning of the biotech plant, civil electrical, mechanical works for the central production building were also in line.
The plant is scheduled to come online in 2007. The company directors are hopeful that through this plant the company will be able to make the country self-sufficient in treatment of Hepatitis C and Cancer and will also be able to leverage Bago' Group's global presence to develop a significant export base in the years to come.
This facility is being set up under its subsidiary company BF Biosciences Ltd, in this Company, Ferozsons Laboratories Ltd holds 80% share of the equity and the remaining 20% is held by Laboratories Bago SA, Argentina.
The year ended on June 30, 2006 under review is also the company's 50th year of operations. During the year company posted net sales in the sum of Rs 752.22 million registering 14.7% growth as compared to Rs 655.76 million posted in the preceding year. However the growth rate of gross profit was a little less at 14.1%. The main reasons for lower growth rate of Gross Profit were increase in raw material consumed, devaluation of rupee against Euro and higher depreciation resulting from a change in the company's depreciation policy.
The directors reported that the company changed its depreciation policy to the straight line method, and also undertook revaluation of its assets in order to keep its financial statements in line with international accounting standards.
The company earned net profit after taxation at Rs 175.87 million as against Rs 153.57 million in the previous year.
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Performance Statistics (Million Rupees)
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30 June 2006 2005
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Share Capital-Paid-up: 100.47 77.28
Reserves & Surplus: 0.32 0.32
Unappropriated Profit: 416.30 305.87
Shareholders Equity: 517.09 383.47
Surplus on Rev of F/Assets: 262.44 54.54
L.T. Debts: 5.32 11.87
Deferred Liability for Taxation 46.91 16.51
Current Liabilities: 110.71 102.21
Fixed Assets: 486.66 265.71
L.T. Investments: 138.32 19.14
L.T. Deposits: 0.44 0.53
Current Assets: 317.05 283.22
Total Assets: 942.47 568.60
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Sales, Profit & Payout
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Net Sales: 752.22 655.76
Gross Profit: 429.38 376.25
Finance (Cost): (2.27) (1.80)
Other Income: 15.35 25.80
(Loss) on Measurement of
Short Term Investments: (4.80) (6.09)
(Depreciation): (45.17) (23.83)
Share in Profit of
Farmacia 98% owned Partnership: 7.18 4.83
Profit Before Taxation: 218.14 215.45
Profit After Taxation: 175.87 153.57
Earnings Per Share (Rs): 17.51 15.29
Share Price (Rs) on 26-9-2006: 172.00 -
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Financial Ratios
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Price/Earning Ratio: 9.82 -
Book Value Per Share: 51.47 49.62
Price/Book Value Ratio: 3.34 -
Debt/Equity Ratio: 1:99 3:97
Current Ratio: 2.86 2.77
Asset Turnover Ratio: 0.80 1.15
Days Receivables: 6 3
Days Inventory: 164 126
Gross Profit Margin (%): 57.08 57.38
Net Profit Margin (%): 23.38 23.42
R.O.A (%): 18.68 27.00
R.O.C.E. (%): 21.14 32.93
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